The Monetary Council of the National Bank of Hungary (MNB) decided to cut the central bank base rate by 25 basis points to 6.00% at a monthly policy meeting on Tuesday.
As MTI reports, the Council also lowered the overnight deposit rate by 25 basis points to 5.00% and the O/N collateralized loan rate by 25 basis points to 7.00%. The rates mark the ends of the central bank's symmetric interest rate corridor.
The policy makers had not changed the key rate since February 2026.
In a statement released after the meeting, the Council said the inflation outlook has improved significantly. With the easing of geopolitical tensions, the global risk environment has become more favorable. The lower risk premium on domestic assets remained, to which the agreement between Hungary’s government and the European Commission, related to EU funds, contributed.
These factors significantly increase the room for monetary policy to maneuver. Looking ahead, Hungary’s risk assessment will be primarily influenced by expectations regarding the fiscal path and the adoption of the euro, the MNB said.
The statement also said the Monetary Council is committed to the achievement of the inflation target in a sustainable manner and constantly assesses the inflation outlook, global developments, and Hungary’s risk premium. Maintaining the stability of domestic financial markets, especially that of the foreign exchange market, is crucial in anchoring inflation expectations and thus achieving price stability.
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